It may be a crazy-scary-bad time for our country and the world, frankly, but there is a little glimmer of a silver lining for one segment of the population -- would-be condo buyers who want to live in Cambridge or Somerville (or Boston for that matter).
After years of low inventory, condos flying off the market, and bidding wars that essentially required buyers to waive all their contingencies, we seem to have arrived at a much calmer and more *friendly* place for those looking to buy.
The chart below illustrates why. As you can see, 2020 started out lagging in condo inventory behind 2019, which already had low inventory. We bottomed out in mid-April, a month after the coronavirus *lockdown* went into effect. From there, inventory picked up, as we all began to realize that we were going to be living with this pandemic for a while, and decided to attempt to go back to what we would have otherwise been doing, including buying and selling homes.
We were still below 2019 inventory until July, when we flipped. As you can see from the chart, inventory this year continued to rise, as more listings came on the market and fewer homes went under agreement. It's normal for July and August to be quieter, so things didn't seem unusual until after Labor Day -- the visual makes clear where we are now -- WAY over our usual inventory for this time of year.
We have not seen this much condo inventory on the market in years. I had to go all the way back to 2011 to even come close. That year on October 15 there were 293 condos on the market in Cambridge and Somerville, so only ten off from the 303 we had on the same date this year. In 2010 we had 417, so we're still not at that level of supply, but...
There is an obvious window of opportunity for buyers here, with lots of selection, the chance to pay a fair price without getting bid up in a competitive situation, and historically low interest rates.
By the way in case you're wondering, we didn't have exponentially more condos come on the market this year -- from January through today, new listings were up just 3% over 2019. The difference is on the buy-side, with fewer people pulling the trigger.
In terms of the longer-term impacts on the market here, I don't think we will necessarily see prices go down. They may, as I've definitely been seeing more price reductions popping up in MLS, but it's too early to tell. It seems that most sellers view this as a temporary situation, and seem to be willing to bide their time for the right offer, even if that means waiting until after the election or even spring of 2021, when we are hopefully in a better place and on track to bring the pandemic under control.